Australian shares rose strongly on Thursday, ending the session at a record closing high after coming within a whisker of tapping new intraday highs, as investors welcomed a de-escalation in tensions between the United States and Iran.
The benchmark S&P/ASX 200 rose 56.6 points, or 0.8 per cent, to 6874.2, pushed higher by gains in all sectors except for energy.
At its highs, the benchmark came within 4.5 points of joining the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite in tapping record levels. Wall Street was driven higher on Wednesday by an easing in risk aversion as the United States responsed in a measured fashion to an Iranian missile attack targeting Iraqi bases used by its troops earlier in the session.
“Iran-US tensions have de-escalated dramatically over the past 24 hours, despite the Iranian missile strikes yesterday,” said Tapas Strickland, economist at the National Australia Bank. “Some geopolitical analysts classed the strike as more symbolic in nature and being a ‘warning shot’ designed not to inflict too much damage on US assets.”
The improvement in risk appetite, suggesting investors have begun to price out the prospect of a full-scale war between the two nations, helped spur gains across most sectors on Thursday.
Technology stocks were the big winner for the session, gaining 2.2 per cent. The so-called WAAAX stocks – Wisetech, Altium, Afterpay, Appen and Xero – all jumped more than 1.6 per cent.
The broader information technology sector has now risen 20.6 per cent since early August, leaving it just 2.4 per cent below the record highs hit in November last year.
While the tech sector didn’t manage to hit record highs during the session, the healthcare sector did, soaring 1.8 per cent and surpassing the previous mark hit in early December last year.
CSL and Resmed, the largest companies in the subindex by market capitalisation, both rose to fresh highs, jumping 1.8 and 1.5 per cent respectively to close at $291.10 and $22.90.
Outside of health and tech stocks, industrials, communications and consumer discretionary all gained more than 1 per cent. Financials and materials posted smaller increases of 0.5 and 0.8 per cent respectively.
Those gains were partially offset by weakness in gold producers, reflecting a large reversal in bullion prices on Wednesday as risk aversion abated. Of the bottom 10 performers for the session, eight were gold miners. Resolute Mining led the falls, sliding 3.6 per cent to $1.215.
The energy sector was also pressured by a steep decline in crude oil prices overnight, ending the session down 0.9 per cent. Woodside Petroleum slipped by 1.5 per cent to $35.60, despite announcing the Senegalese government has given it the green light for a new offshore oil project.
Source: Thanks smh.com